In this summary notes Bettina von Stamm shares her thoughts from the Chief Innovation Officer Summit 2014. Please note that the summary notes are based entirely on her personal perspective and point of appreciation, therefore undoubtedly utterly biased in terms of what has been picked up (or ignored), and hence is being shared here.
(Please do also bear in mind that Bettina was not able to stay to the end of the event, and did not listen to all presentations, nor as carefully to some of them as she could have …)
The essence, take-aways & common themes
- If you want to create an innovative organisation focus on behaviours, psychology, neuroscience – yeah, finally !!!!!
- It was amazing to note how many people emphasised the importance of culture (the famous Peter Drucker quote: “Culture eats strategy for breakfast any time.” What somewhat amuses me is that we have known this for a looooooong time. Should now be the time something is finally been done about it ? !
- The art lies in the HOW, how to engage and involve people, internally as well as externally; it is all about relationships, and the appreciation and understanding of individuals; (as I always say, people don’t resist change, they resist being changed…);
- If you want to create an (more) innovative organisation there is no other way: it has to be a systemic, holistic approach (by the way, that was the topic of the Innovators Anonymous (=ILF Networking Group) meeting in September 2014);
- Create an innovation strategy – it defines where you play, and where not, how innovation is organised – processes, structures, people etc. (Innovators Anonymous ran a session on this topic back in 2006 – if you ask nicely I might make it available :-));
- If you want innovation, seek diversity, collaborate across boundaries (internally and externally); the trickier the problem, the wider you should cast your net; the more radical an innovation opportunity you seek, the wider the circle of people to involve; how and where do you currently look for input / skills / competencies that you are likely to need for breakthrough / disruptive innovation?
- Using visuals is hugely powerful, improves understanding and creates a shared language – one of the challenges when collaborating in diversity (see cards used by M&S or Promise Communispace referred to in these notes);
- There is quite a bit of potential for innovation in Big Data; it can provide (almost) real time insights on emerging trends and developments i.e. identify and amplify you with ‘weak’ signals’, it can also be used to test and explore with relevant audiences; the tricky bit? Knowing how to ask the right question…
- Perhaps one final observation: passionate and engaging presentations beat content any time. Of course, ideally you want an engaging, humorous presentation that is meaningful and relevant …
What has been picked up over the two days
Selvan C., Director Global Innovation at BP
The conference got off to a great start with Selvan C, Director, Global Innovation at BP pointing out that you can have all the process in the world and innovation will not happen. What you need are the right kind of behaviours, and culture. Hallelujah! Finally an innovation conference opening that gets to the heart of the matter straight away.
Dario Resnati, Chief Innovation officer at BNP
It got even better: Dario Resnati, Chief Innovation officer at BNP Paribas declared that it all about psychology. Yeah! That’s what I want to hear (and have been believing in since my PhD 94-98…). Brilliant. Rich pickings in his presentation !!! Let me see…
- if you want to create an innovative organisation, think like a psychologist! Doing so will help you recognise and understand many blockers to innovation better – and give you a handle to start addressing them;
- Dario had some fantastic examples of ‘attentional blindness’, meaning that we tend to focus on certain thing, being entirely oblivious to anything else that is going on around us. Those of you who know the ‘gorilla video’ are aware of it; there are more great examples that really bring it home that, and how much, attentional blindness affects all of us. So we constantly miss about a thousand things – unless we are becoming more aware of this and start looking more carefully… For example, see how many changes you can spot when watching a short video for the first time!
- Read up on neuroscience, understand how our brain works, be aware how quickly it recognises patterns and ‘programmes’ automated responses. This might do a great deal for understanding barriers to and challenges of innovation…
- Ask questions! Asking questions, the right ones, in the right way, helps people change perspective; ask dumb questions, they help uncover assumptions and things that are deeply embedded in ‘the way we do things around here’;
- Don’t give up, keep trying! Between performances Circus elephants are being chained up. Young elephants don’t like chains so they try to break them – but being young and small they can’t. They might keep trying for a while, eventually giving up because they realise they can’t. However, such a chain would of course be no obstacle for a grown elephant! If only he would try. What are your chains? Break them!. Don’t stop trying, and keep checking your assumptions
- One final point point from Dario’s presentation: know your own preferences (and shortcomings), this really helps to develop empathy with others which in turn helps to collaborate (better) across diversity.
I may have gone a little beyond what Dario has actually said, that’s because I feel truly passionate about this !
How Dario got senior management to buy into focusing on psychology rather than processes? By having them EXPERIENCE the innovation challenges that are results of how we / our brain operates.
Luke Mansfield, Head of Innovation at Samsung
Luke Mansfield, Head of Innovation at Samsung was next. He was talking, as he put it, not about innovation fatigue but about fatigue with BAD innovation. I liked that, talking a lot about ‘the dark side of innovation’ myself (a video on the first time I talked about it at a conference is available on youtube). Some good stuff here, though I also felt there were some things in there for the sake of being contrary and provocative…
Luke started with one important point: when do you start to change? His question was nicely supported by the following picture:
He also talked a lot about at what point organisations are ready to kill / sacrifice huge past investments. What came to mind straight away is one of the most useful concepts I learned at London Business School: sunk cost. It basically says, when ever you make an investment decision only look forward, don’t look back and stopp throwing good money after bad.
Luke also talked about Schumpeter ‘creative destruction’ and use ‘the violence of change’ a lot (as well as pictures of guns and cannons – maybe it is my aversion to weapons coming through, or my feminist side?) he quoted designer Richard Seymour who says that he spends 90% of his time preparing his clients for the violence of change.
Interesting view on failure – in his presentation he stated that you have to get it right every time. He moderated this after a post-presentation question saying that you should avoid failure for the sake of it – well, duh! Why is there so little common sense! Of course if you innovate there will be ‘failure’; it depends when on the journey it happens, and how you deal with it!
As a way to ensure success every time he promoted Big Data. Sure, big data ca help you identify better starting points (if you are able to ask the right questions), and also conducting experiments with users early helps to improve and validate your offering (if you go about it in the right way…).
What I did like what his suggestion that companies should start putting a price tag / cost of doing nothing (by the way, Imaginatik has used a concept called ‘Innovation Gap’ some time ago, which is exactly about calculating the gap between existing offering and growth aspiration that has to be filled somehow).
Three more take-aways from Luke’s presentation:
- Get consumer feedback under stressful or at least normal conditions – rather than in the completely relaxed environment of a focus group;
- Never underestimate the power of an anecdote;
- Focus on the benefits (rather than the technical performance).
Here pre-lunch fatigue may have set in as I have very limited notes on the following 4 presentations:
Mark Payne, Co-founder of Fahrenheit212
- Mark Payne Co-founder of Fahrenheit212 who talked about Two-Sided Innovation. Hm what can I say… Fahrenheit 212 focuses on identifying and creating products at the intersection of business and consumer needs. Upon my question about adding 3BL sustainability into the mix he suggested that it is implicit in business and consumer needs – I just don’t seen much evidence of that! Smooth consultant talk at best …
Jean-Luc Meyer, SVP Strategy and Innovation at Schneider Electric
- Next on the menu was Jean-Luc Meyer, SVP Strategy and Innovation at Schneider Electric. He spoke about innovation opportunities arising from a combination of simpler user interfaces, affordable technology, and cross domain applications and highlighted challenges around cyber security, system cloud architecture and data science.
Ariel Avitan, VP Marketing at Signals Group
- This was followed by Ariel Avitan, VP Marketing at Signals Group who was talking about Intelligence for Innovation and Domenico Ventura, Head of Innovation at BAT- I am afraid I did not take notes on either of them …
Jochen Hurlebaus, Head of R&D at Roche
After lunch Jochen Hurlebaus, Head of R&D Services at Roche, shared some thoughts on how Roche goes about ‘Fostering Your Innovation Culture’, drawing on the journey of the Professional Diagnostics part of the business. Here a couple of things that struck me:
- I like the fact that he emphasised a holistic innovation and intellectual property management approach
- He cited Peter Drucker’s quote of “Culture eats Strategy for Breakfast”. Nothing more true in the context of innovation!
- They started by identifying traits of innovators (see below), then discussed the status quo of risk taking & courage, openness to change, beliefs and leadership support in a 1.5 workshop.
- As a result their main ambition became to extend the comfort zone, and reduce the ‘panic zone’
Jochen described their approach as ‘bottom-up’, involving the following three key elements:
- Build / start a community-based Innovation Culture
- Expand the comfort zone, at the individual level
- Build on and improve the innovation culture by integrating innovation into personal MBOs
Chris Townsend, Chief Marketing Officer at Imaginatik
Chris Townsend, Chief Marketing Officer at Imaginatik shared some interesting statistics and insights in his presentation ‘Leading Innovation Into The Mainstream. Here a couple of things that I found particularly interesting / resonate most with me:
- Building on a survey Imaginatik had conducted in 2013 which revealed that 33% of companies have a central innovation function, he argued that innovation was becoming ‘mainstream’.
- He described a journey from ‘innovation’ and ‘operations’ being separate to becoming intermingled. In order for that to happen he identified four areas to work on:
- Identifying where to innovation (types of innovation, maturity, balance of disruptive and incremental change)
- How to make difficult decisions (using appropriate measures, understanding the portfolio, and the impact of / on people, being clear of what to NOT do)
- How to keep (the right) people engaged (meaningful ongoing engagement, understand and involve different personality types / diversity, understand participation patterns)
- And how to transition innovations into production (clarity of process, educate finance, fail fast, establish and spread good practice.
Alan South, Chief Innovation Officer at Solarcentury
Next in line was Alan South, Chief Innovation Officer at Solarcentury, who was sharing some thoughts and insights of innovation in CleanTech. He kicked off by defining ‘pure cleantech’ as something that is repeatable, using the resources of the planet, for ever. CleanTech, a terms that company 3i has split CleanTech into 18 sectors, 12 of which are in the energy sector! In his view ‘smart grid’ & ‘energy storage’ are particularly interesting and worth watching.
Cost has always been a big factor in the adoption of solar – so it is good news to understand that each time installations double the cost goes down by 22%. In the context of solar it is interesting to note that.
As cost is such a critical factor, making it an investment product might be a good idea – and this is what Solarcentury have done: The challenge was, how to make something an investment that was integral part of something else, e.g. a building? Because of the various lease structures and warranties, the solar plant had to be independent from the building’s structure – which in turn meant that the solar installation had to stay on the roof without being fixed to it – which is what Solar Century achieved. They developed some wind modelling software in house. Through this software they were able to design a roof layout that would ensure that the solar plant would stay in place through the aerodynamic load pushing it down alone. They even had to prove that the roof would even stay in place in a one-in-a-hundred-year storm. With this accomplished they were then able to, for example, lease a the roof of an industrial building for 25 years, and sell that roof lease, solar plant, and maintenance contract to a German investment fund.
A second solar energy challenge Solarcentury addressed was the ‘ugly factor’ by creating some solar panels that look like slates, and can be easily installed by traditional roofers rather than requiring specialists. Their tiles require no change to existing roof designs, it could be fixed to standard roof battens, and that could be installed by any roofer.
Simon Colbeck, Head of GM Innovation at M&S
Simon Colbeck, Head of GM Innovation at M&S, talked about ‘Embedding Innovation in Marks & Spencer’. What I thought was interesting is that Simon is head of both quality and innovation at Marks & Spencer. Interesting in as much as it can be seen as conflicting or at least at opposite ends of a spectrum – as one of Simon’s slides (see right) showed.
However, Simon considered it to be an advantage to have both under one head. As he emphasised, innovation at M&S is all about balancing the Operation World or trading, retailing and reacting with the Innovation World of problem solving and long term thinking. A point that is often forgotten even though we understand that we need to put a large number of ideas into the funnel – in Simon’s experience you need to put 50 ideas into the funnel to get 2 winners into the market – we often forget that killing ideas is at least as important as creating them!
I quite like the title of Simon’s next slides: Innovation loves boundaries, it hates barriers. Those of you who know me know that I love the short video by Monty Python, part of their ‘Silly Olympics’, titled, ‘Race for people with no sense of direction’. Without direction or boundaries it can be quite tricky to come up with meaningful ideas!
In the following Simon shared some key characteristics of the M&S innovation culture and innovation processes:
Innovation Culture Characteristics
- Cross functional training
- Encouraging risk
- Building diverse teams
- Embracing and understanding ambiguity
- Building innovation into the physical work place
Simon emphasised the importance of creating processes and structures that bring people from different areas together. It is also important to ensure that the processes are appropriate to the communities that have to ‘live’ them, and that they feel as little ‘processy’ as possible.
- Set long term goals
- Create Platforms
- Have a defined review process
- Ensure senior visibility & commitment
- Ensure clear visibility of ideas – not least to avoid duplication!
- Understand project management
- Integrate innovation across all functions
He closed with two further recommendations:
- Celebrate innovation success
- Market your innovations internally to re-enforce culture
Michael Pozas-Lucic, VP Innovation at Air France KLM
I rather liked one of the opening statements of Michael: “We have survived the storms by being adaptable, and we are staying alive by looking ahead.” I also like his statement that “The innovation storyline needs to keep the board awake at night. They need to feel that it is going to hurt if they don’t act.” Brilliant, isn’t it?!
To create a sense of urgency he also shared some statistics: the average lifetime of the S&P 500 in 1937 was 75 years, in 2012 it was only 15! This means that in 2027 75% of current S&P 500 companies will no longer exist…
If the environment for the airline industry has always been volatile, it will be even more challenging in future! Michael shared a slide showing a collection, some with game changing potential.
Not only the industry context is changing, Michael also pointed at a few things that are changing in the innovation landscape:
- New business models – continuous disruption of business models is taking place in all industries; cross-sector competition is becoming the norm;
- Rapid product / service innovations – missing a necessary product innovation more often means stumbling;
- Innovation moving fro corporates to start-ups – for a century major innovation came from big corporations; currently most innovation originates from (unknown) SMEs and startups;
- Open innovation – large companies that do successfully innovate, increasingly apply Open Innovation.
I felt supported in my own conviction that ‘the times of either / or are over’ when seeing Michael’s slide on the right – it is not about either playing not to lose, or playing to win, it is about both!
He, like a few others at the conference, also made a strong argument for having an innovation strategy, as well as an intranet enabled system for submitting, sharing, enhancing, selecting and, developing of ideas. They run specific challenges, often in collaboration with external experts, stimulate and accelerate innovation with innovation programs and events, and share insights, challenges and best practice through the KLM Innovation Roundtable (involving companies such as ABN-Amro, Ahold, Deloitte, de lange landen, DSM, Eneco, Friesland Campin, Heineken, IBM, Koninkijke Luchtmacht, kpn, Philips, Post of Rotterdam, Rabobank, Tomtom, usg professionals and vodafone) and hackathons. Strategic innovation topics include Biofuels, Big Data, Retailing, Advanced Robotics, and 3D Printing.
Here a few other activities:
- Business Model Innovation (KLM Academy; KLM Health Service: Airfrance / KLM/ Martinair Cargo; Retailing)
- Corporate Venturing with 7 investments to date (and first results after 3 years)
- Scouting for start-ups (since 20123) – 100 start-ups reviewed, 4-+ introduced to KLM, 5 plus ongoing projects
He concluded with the slide on the right, emphasising that strong (holistic) innovation management is key.
Yann Barbaux, SVP Officer at Airbus
What stuck in my mind from Yann Barbaux’s (SVP Officer at Airbus) presentation on “From Disruption to Adoption” was the immense increase in efficiencies achieved for aircraft over the past 40 years:
- We have seen a10-fold increase in aircraft production;
- Fuel burn has been reduced by 70% through progress in aerodynamics, in flight controls, reduction in weight of structures, and use of composite materials;
- Indeed, from 5% composite structures in 1974 we now have 50%;
- Over the past 40 years we have also seen 75% reduction in noise emissions.
He also pointed out that their market, and that of their customers, the airlines is changing significantly. Aircraft manufacturers see competition emerging from China, Russia and Brazil while low-cost airlines do not only create additional competition for Airbus customers, but also open up new customer segments in those who were previously unable to afford air travel.
Kevin Mobbs, Director of Innovation programs at InnoCentive
The next presentation, “Engaging External Networks in the Innovation Process”, Kevin Mobbs, Director of Innovation programs at InnoCentive and Jochen Hurlebaus, of Roche (who had presented earlier) shared thoughts and insights through a collection of wonderful quotes.
The whole idea behind organisations such as InnoCentive is finding ways to access great people with great ideas and solutions that do not work for you, or, as Bill Joy, Co-Founder of Sun Microsystems said, “No matter how bit you are, most of the smartest people work for someone else”.
Another quote shared by Kevin and Jochen that I absolutely love in the context of innovation and idea generation / opportunity identification was by Albert Einstein: “If I had one hour to save the world, I would spend 55 minutes defining the problem and only 5 minutes finding the solution”.
Yuval Dvir, Head of Transformation at Skype
In his presentation on “Balancing Innovation With Corporate Control” Yuval Dvir, Head of Transformation at Skype, shared some thoughts and insights the business transformation initiative he had led over past 18 months. As he explained, it was focused on enabling project managers to act more like mini CEOs, helping them make better decision, and create an environment that supports this. Like many other over the course of the two days, Yuval too emphasised the importance of culture, at the same time highlighting that it is about having a number of different things in place – see graph on right. Interesting to note that the theme of ‘culture’ also seems to have dominated the parallel session of Chief Strategy Officers.
While it all comes down to culture in the end, appropriate processes and a supportive business infrastructure need to be in place so that great ideas can be implement if and when they occur.
Preparing for the transformation exercise they ensured the following,
- In order for the change (and innovation) to be sustainable it was essential that all executives were on board; it needed to be accepted as a corporate initiative that has centre stage;
- Ensure that strategy does not change too frequently – if it does people will not act but wait for it to go away;
- They positioned the change in ways of working as a personal development opportunity, preparing people for the future of work more generally.
- All data and information needed to be accessible to everyone, and in formats that are meaningful; in order to achieve that they used a lot of visualisation.
For their transformation journey they focused on the following:
- Metrics & experimentation – this was primarily about alignment and the creation of a shared language that would help people from different disciplines and part of the business work together better, and avoid miscommunication.
- Transparency & traceability – while avoiding bureaucracy and using the metrics, this was about showcasing how much time people were spending on different aspects of business (innovation / business as usual) with the aim to ensure that sufficient time would be allocated to thinking and innovating.
- Business rhythm – this was about ensuring that the use of data and alignment with strategy would be integrated into the daily business rhythm
The graphs on the right and below show the pieces of the puzzle put together:
- Ensuring that the right data, in the right format gets to right people; (and having the right people to maintain the right culture)
- Having the right tools;
- Have governance in place to make it happen;
- Having the right culture throughout – not just the soft elements, but also how risk is perceived and how we interact, e.g. being punctual.
Nick Coates, Director at Promise Communispace
In his presentation asking “Collaborative Innovation: Can Consumers Really Be Creative?” Nick Coates, Director at Promise Communispace, argued for a different way for working with consumers: through true, close and ongoing relationships, to move towards true co- creation rather than observing consumers from behind a one-way mirror.
He started with a couple of interesting statistics:
- In 2009 business leaders declared that 41% of their best ideas came fro customers (35% from heads of business units, 33% from R&D);
- US adults spend 200 billion hours a year watching TV – it took 100 million hours to create Wikipedia. So how about engaging people in innovation instead of watching TV?
For Nick engaging consumers in innovation is not about asking them what they want (who does not remember Henry Ford’s quote: “If I had asked people what they wanted they would have told me: faster horses”) but about truly working and collaborating with them, working with emotions rather than facts. Below nine principles that Nick’s company believes in and that underlie their work with customers:
- Connect: get deep & personal – relationships are the source of results
- Upskill: resource your co-creators – everyone can be creative
- Challenge: embrace the extreme – breakthroughs come from unreasonable requests (throw tantrums!)
- Offload: clear the past – only authenticity can overcome resistence
- Disihibit: break taboos and assumptions – build confidence to overcome inhibitionswhich kill creativity
- Mix it up: create a diverse group – which thumps representation any day§
- Catalyse: continously build on and iterate ideas – through a collaborative process
- Excite: create an epic invitation and setting – the ambition of addressing big challenges invokes a big response
- Reframe: use and swap different lenses for the problem – perspective is everything
Robert Kirschbaum, VP Open Innovation at DSM
Robert Kirschbaum, VP Open Innovation at DSM, talked about “The Balancing Act Between Radical And Incremental Innovation” – a presentation after my own heart where insights and approaches resonated deeply. If business reality is as exciting as the representation, DSM is a truly inspiring organisation.
I guess DSM has a great history to build on. Robert’s slide on the right shows how the company has changed over time: from a mining company when starting off(DSM actually stands for Dutch State Mining) to a life & materials sciences company today.
What I liked immediately is that DSM uses broader global societal trends to focus their activities – see right. It allows them to drive focused growth that seeks to create value along all three dimensions of the triple bottom line: people and planet as well as profit.
Robert also explained why the triple bottom line is so important to DSM – nothing does it more powerfully than the graph below: if we want to enable everyone on this planet to live equally well we need to learn to life within the resource constraints of the one planet we have (by the fact that I give the graph a lot of space you can see how important I think this is, and how much I agree with it…).
Neither serious pursuit of innovation nor the focus on the triple bottom line would be possible were there not a deep understanding of and commitment to both by the top. This is reflected not least in the fact that the DSM Innovation Centre sits between the four business areas (nutrition, pharma JVs, performance materials, polymer intermediaries) and the Managing Board into which it reports. Another indication of how seriously innovation is being taken are the activities the Innovation Centre engages in – see right.
Here a couple more cornerstones to ensure innovation happens:
- Open Innovation plays an important part in the mix, and Robert contrasted the difference between open and closed innovation in the slide on the right.
- Risk mitigation through venturing. Risk is always a key argument used against innovation – it is too risky. Certainly for radical innovation there will always be risk and uncertainty associated with it. If we are doing something that has not been done before, or not been done in our specific context, then we can anticipate and simulate the outcome, but what really happens we will only understand once it has happened. Corporate venturing allows us to dip our toe into the water without getting fully wet as well as try the temperature of many more different waters than if we tied to do it all on our own.
In understanding the aversion to risk and challenges around (radical) innovation, another of Robert’s insights was really helpful: managers tend to play ‘not to lose’ whereas entrepreneurs ‘play to win’. What this means is summarised in the slide on the right. The ‘games’ each plays are different. Both are important, each has different rules and criteria for success. That’s why DSM manages innovation at the portfolio level.
The two dimensions that define their portfolio 99.9996% of world population outside DSM! are ‘Market Maturity’ and ‘Disruptiveness’ whereby they label the box with emerging markets and high disruptiveness as ‘Red Box” where the goal is to explore and build.
The graphs overleaf the two-by-two and the balancing act between radical and incremental innovation – which is of course not two separate boxes but a continuum.
One of the important aspects for me was that DSM does not only talk about the desire for disruptive innovation, they have established specific platforms, playing fields that are linked with bigger social needs and trends, where they see innovation beyond the incremental, namely Biomedical, Bio-based products and services, and Advanced Surfaces.
Robert rounded of his presentation with a great a balancing act number of great examples to demonstrate commitment to both innovation and sustainability, and how these to go perfectly together – including developing an animal feed for cows that significantly reduces methane emissions (an not insignificant contributor to greenhouse gas emissions and hence global warming)!
The graph below shows that the the commitment to innovation and sustainability has paid off!
He summarised the lessons of the lessons learned as follows,
- Sustainability and Innovation go hand-in hand
- Venturing creates options and mitigates risks
- Create enough breakthrough options in the pipeline • Nominate and empower “Intrapreneurs”
- Blue Box activities reinforce DSM’s business
- Red Box Platforms rejuvenate DSM’s portfolio
If you have been there, or have seen the programme online you will know that the above is quite selective. Is the excitement about the first few presentations and in my view things going downhill from there just showing my own personal beliefs and biases?! If anyone would like to add their thoughts I’d be delighted!